3-Hydroxyquinoline-2,4-diones 1 react with isocyanates to give novel 1,2,3,4-tetrahydro-2,4-dioxoquinolin-3-yl (alkyl/aryl) carbamates 2 and/or 1,9b-dihydro-9b-hydroxyoxazolo[5,4-c]quinoline-2,4(3aH,5H)-diones 3. Both of these compounds are converted, by boiling in cyclohexylbenzene solution in the presence of Ph(3)P or 4-(dimethylamino) pyridine, to give 3-(acyloxy)-1,3-dihydro-2H-indol-2-ones 8. All compounds were characterized by IR, and (1)H- and (13)C-NMR spectroscopy, as well as by EI mass spectrometry.